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This week’s highlights:
After weeks of ignoring rising bond yields and potential Federal Reserve interest rate hikes later this year, stock investors appeared to suddenly take notice on Friday, in the wake of a stronger-than-expected May jobs report. Stocks ended the week with a nearly 2.7% slide, their worst day and week since October.
Despite the market’s reaction, some economists are less convinced that the jobs report will dramatically change the outlook. While hiring has been strong, they don’t see it putting pressure on the Fed to move on rates. Find out why here.
During Friday’s selloff, growth stocks were hit hardest. Earlier in the week, Morningstar chief US strategist David Sekera came out with his latest market outlook, advocating for some profit-taking on growth and rebalancing toward value.
Beyond the macroeconomic story, AI continues to dominate the conversation, especially with software stocks, which suffered big losses starting late last year. However, a few software names have bounced in the wake of first-quarter earnings. This week, we checked in with three of Morningstar’s software analysts for their takes on whether the stocks they cover are are showing signs of life after AI.
Of course, the big news continues to be the looming IPO for Elon Musk’s SpaceX. Morningstar analysts Nicolas Owens and Suryansh Sharma launched coverage of SpaceX on Monday, detailing their thoughts on the company’s prospects and valuation. Check out the SpaceX deep dive. Meanwhile, Morningstar Indexes’ Dan Lefkovitz weighed in on the effect the SpaceX IPO and expected offerings from OpenAI and Anthropic will have on the stock market. He explains why the impact may not be as sweeping as some might expect, and how it will play out over time.
However, not all IPOs are going off with a bang. This week, the debut of Honeywell-backed Quantinuum was more fizzle than sizzle after a strong pricing.
Lastly, this week, we have our monthly screens, including for May’s best- and worst-performing stocks, as well a look at how the most widely held ETFs fared. We also updated the monthly screen for undervalued stocks that just raised dividends. This month, four stocks made the cut, including a well-known home improvement chain and one of the biggest beverage companies.
As always, be sure to visit our Markets page for our latest coverage and live stock market updates, along with our full weekly calendar of key upcoming data and events.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
